Post session - Quick review

Halting three sessions’ gaining streak, Indian equity markets petered out early gains to the snap the volatile session with colossal loss of over a percentage point on Tuesday. Double whammy of faltering rupee and global risk off environment led boisterous bulls surrender fort. After starting the session on a promising note, barometer gauges went off offloading gains, to end the day in red. Intense selling pressure witnessed in the second half of the session took the markets into red, even though leads from European region remained positive. The 30 scrip sensitive index, after starting the session above the 16300 fortress, offloaded over hundred and fifty points, to end sub 16100 bastion. Similarly, the widely followed index, Nifty, after knocking off over fifty points, ended sub 4900 psychological level. The broader indices, too hurled with loss of over half a percentage points.

On the global front, extending the previous day's recovery from a two-month slump, European stocks rose on Tuesday as prospect of new measures to fight the euro zone debt crisis, took center stage. Even Asian shares, ended the trade in green as investors resorted to bargain hunting amid some supportive developments from the meeting of group of eight (G8) nations and hopes that world’s second largest economy China would employ further stimulus measures to spur growth of the global growth machine.

Back on the home turf, freefall of Indian currency acted as the main mood dampener for the Dalal Street. Selling pressure was evident in Indian equity markets by foreign funds after the rupee fell to record low levels to 55.39 per US dollar despite the Reserve Bank arbitrage measures to support the falling domestic currency. On the BSE sectoral chart, weakness was witnessed in 10 out of 13 sectoral pivotal, high beta Metal stocks combined with Banking and Power, prompted turbulent times for bourses. Auto stocks also lost ground as decline in rupee impacts their royalty payments and import cost. Top car maker Maruti Suzuki tumbled 4% while M&M, Hero Motocorp and Bajaj Auto were down 0.5-1%. However, Information Technology got blessing in disguise an rallied with rupee deprecation as software exporters derive lion share of their revenue in dollars. Additionally, Oil Marketing companies stocks such as BPCL, HPLC, Indian Oil gathered steam on building hopes of petrol price hike. Empowered group of ministers, led by finance minister Pranab Mukherjee, will meet after the end of the current session of Parliament and the UPA II’s third anniversary on May 22, 2012, to consider fuel price hikes. The oil ministry is likely to propose an increase of Rs 3 per litre in the price of diesel and Rs 50 in domestic LPG cylinders, apart from recommending a cut down in the supply of LPG cylinders to higher income groups.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1092: 1548 while 126 scrips remained unchanged. (Provisional)

The BSE Sensex lost 151.03 points or 0.93% and settled at 16,032.23.The index touched a high and a low of 16,366.72 and 16,000.84 respectively. Only 5 stocks advanced against 25 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.51% while Small-cap index was down by 0.65%. (Provisional)

On the BSE Sectoral front, IT up by 0.56%, TECk up by 0.22%, CD up by 0.21%, however Metal down by 1.71% Bankex down by 1.55%, Power down by 1.37%, Realty down by 1.21% and CG down by 1.14% were the top losers. (Provisional)

The top gainers on the Sensex were Tata Motors up 1.43%, TCS up by 1.33%, BHEL up by 1.19%, HDFC up by 0.30% and Wipro up by 0.03% While, Tata Power down by 5.29%, Maruti Suzuki down by 4.27%, Sterlite Industries down by 3.76%, SBI down by 3.56% and Hindalco Industries down by 3.04% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) has taken and will continue to take steps to arrest the downfall in the rupee, stated Subir Gokarn, deputy governor of RBI. However Gokarn opined that ultimately the price of the rupee shall be determined by the capital inflows.

The Rupee fell to an all time low of 55.03 against the dollar on 21 May. The fall was essentially due to the high demand for the dollar from the oil companies. The widening current account deficit also contributed to fall.

The rupee that fell by 22% between August and December 2011 has dipped by 18% this year. Even though most currencies in South East Asia have performing badly, rupee has been one of the worst performers. 

The RBI on its part has not only dug into its reserves of $293 billion but has also announced various incentives to increase the inflow of the dollar. These include relaxing interest rates caps on non-resident deposits and asking exporters to convert half of their foreign currency earnings into rupee. Gokaran has also hinted at the possibility of the RBI buying bonds through open market operations (OMO) again this week.

India VIX, a gauge for market’s short term expectation of volatility gained 1.96% at 24.39 from its previous close of 23.92 on Monday. (Provisional)

The S&P CNX Nifty lost 45.55 points or 0.93% to settle at 4,860.50. The index touched high and low of 4,956.35 and 4,849.90 respectively.15 stocks advanced against 35 declining on the index. (Provisional)

The top gainers on the Nifty were  TCS up by 2.46%, HCL Tech up by 2.20%,Tata Motors up by 1.55%, Cairn up by 1.33% ,SAIL up by 1.21%.(Provisional)

On the other hand Sesa Goa down by 5.38%,Tata Power down by 5.33%, Maruti Suzuki down by 5.04%, Sterlite Indsutriess down by 4.01%, and Sun Pharmaceuticals down by 3.65% were the top losers. (Provisional)

The European markets too were trading in green zone, with France's CAC 40 up 0.57%, Germany's DAX up by 0.57% and Britain’s FTSE 100 up 0.73%.

Sentiments remained bullish in the Asian region and all the Asian equity indices rallied on Tuesday ahead of European Union summit to be held on May 23, 2012. The market-men are hoping that leaders, at an upcoming summit, will take some important measures to promote growth and find ways to keep Greece in the euro zone. While, strong performance on Wall Street too aided the sentiments in the region. Meanwhile, Hong Kong and China shares rose 0.62% and 1.06% respectively, supported by Chinese growth proxies on report that Beijing will fast-track investment approvals in infrastructure space to battle lethargic conditions in the world’s second-largest economy. Moreover, Japanese Nikkei and South Korean KOSPI Composite surged 1.10% and 1.64% respectively to extend Monday's rebound, as investors kept themselves busy in picking up blue-chip stocks after last week's flurry of aggressive selling, triggered by concern over a deepening euro crisis.